The Bear Cave #264
New Activist Reports, Recent Resignations, and Tweets of the Week
Welcome to The Bear Cave! Our last premium articles were “Problems at AppLovin (APP)” and “Problems at Gorilla Technology Group (GRRR)” and our next special investigation comes out Thursday, March 20.
Following The Bear Cave’s investigation, Gorilla Technology Group issued a press release titled “Gorilla Sets Record Straight on Baseless Market Speculation.” Gorilla’s press release stated:
“The blog post in question relies on innuendo and vague insinuations rather than facts. Notably, the author made no attempt to verify their claims with the company before publication. Gorilla remains fully transparent in its operations, regularly disclosing financial and business updates, and stands by its strong fundamentals, growing contract backlog, and clear strategic direction.
‘If you want to understand Gorilla, read our research coverage by analysts from Alliance Global Partners and Northland Capital,’ said Jay Chandan, Chairman and CEO of Gorilla. ‘These seasoned professionals have decades of Wall Street experience and have conducted rigorous due diligence on our company. Both analysts have put buy ratings on Gorilla. By contrast, a self-published blogger is not a credible source of analysis.’”
Gorilla’s stock fell ~30% in the two days following The Bear Cave’s investigation. We stand by our reporting.
New Activist Reports
Muddy Waters Research published a second article on FTAI Aviation (NASDAQ: FTAI — $11.4 billion), an aerospace products company. Muddy Waters alleged the company “could be violating U.S. sanctions against Iran” and shared photos published on LinkedIn from an Iranian aerospace business that included FTAI packaging in the background. Muddy Waters concluded,
“It’s unclear to us whether this was a one-off or part of a pattern of widespread prohibited conduct. To the extent it’s more towards the latter, this would raise serious questions overall about FTAI’s culture and business.”
In January, Muddy Waters alleged the company engaged in channel stuffing and inflated EBITDA in its Aerospace Products segment by over-depreciating assets in its connected leasing segment.
Recent Resignations
Notable executive departures disclosed in the past week include:
CFO of SolarEdge Technologies (NASDAQ: SEDG — $976 million) “has taken a personal decision to step down from such positions” just six months after being promoted into the role. In August 2024, the company’s CEO also resigned and later left the board as well. In September 2023, April 2024, and July 2024 SolarEdge was on the SEC’s B7A FOIA exemption list, indicating a potential undisclosed long-running SEC investigation.
CFO of ProPetro Holding Corp (NYSE: PUMP — $751 million) resigned effective immediately from the company after four and a half years. The company’s Chief Accounting Officer also resigned in August 2023 after four years and in March 2023 the company switched auditors from Deloitte to RSM US LLP. In 2019, Culper Research accused the company of self-dealing and undisclosed related-party transactions.
CFO of BrightSpring Health (NASDAQ: BTSG — $3.04 billion) resigned effective immediately after seven and a half years. Last year, The Capitol Forum published several critical articles alleging the company is “endangering the health and safety” of its customers. Last month, the company was on the SEC’s B7A FOIA exemption list, indicating a potential undisclosed SEC investigation.
CEO and Chairman of Kroger (NYSE: KR — $48.3 billion) resigned “effective immediately” after 11 years. The company disclosed:
“On February 21, 2025, the Board of Directors was made aware of certain personal conduct by Mr. McMullen and immediately retained outside independent counsel to conduct an investigation, which was overseen by a special Board committee. Mr. McMullen’s conduct is not related to the company’s financial performance, operations or reporting, and it did not involve any Kroger associates. In connection with his resignation, Mr. McMullen will forfeit all unvested equity awards outstanding under the company’s 2019 Long-Term Incentive Plan and will not be eligible to receive payment of a 2024 bonus.”
President of Worldwide Field Operations at Samsara (NYSE: IOT — $19.8 billion) stepped down after nearly two years. In September 2023, Spruce Point Capital alleged the company “grew through aggressive practices such as contract buyouts and customer financing, which helps explain why it has long been one of the least profitable SaaS companies.”
Chief Accounting Officer of eXp World Holdings (NASDAQ: EXPI — $1.52 billion) resigned after four years. In April 2022, The Bear Cave raised concerns about the company’s “dubious accounting, regulatory snafus, an SEC subpoena, high insider selling, and a questionable recruiting pipeline promoted by a prominent Scientologist.” The Bear Cave later published on more problems at eXp in May 2024 and July 2024.
Lead Independent Director of Hershey (NYSE: HSY — $37.5 billion), Victor L. Crawford, “notified the company of his intention not to stand for re-election” after five years. In January, the company’s CEO and Board Chair, Michele Buck, resigned with no clear successor and the board disclosed it would “consider external and internal candidates, in partnership with a nationally recognized search firm.” In July 2023, The Bear Cave warned that Feastables, a chocolate brand started by YouTuber MrBeast, would take share from Hershey. In March 2024, The Bear Cave published on Hershey again and wrote,
“The Bear Cave is more confident than ever that Feastables is taking share from Hershey. In short, Hershey is a melting giant.”
Data for this section is provided by VerityData from VerityPlatform.com
News of the Week
“Stock Promotions Gone Wild” (Herb Greenberg)
“These are the commercials unabashedly touting stocks. They’ve been running, seemingly increasingly for months and months. But recently there’s a new twist: Instead of a male or female announcer extolling the virtues of the company, it’s the CEO.”
“Hedge fund Elliott bets €670mn against TotalEnergies” (FT)
“Hedge fund Elliott Management has taken a €670mn short position in French energy major TotalEnergies according to regulatory filings, as the US activist firm agitates for change at rival BP… A person familiar with the hedge fund’s thinking said the position was part of Elliott’s global hedging program.”
“Big Consulting Bosses Meet With Trump Officials to Save Contracts” (WSJ)
“Executives from EY, Booz Allen and others are being told to ‘defend the spend’ on their work for the government—and identify possible cuts.”
Tweets of the Week
Until next week,
The Bear Cave